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Zee Ent: GST Short term Negative but Long term Positive - Views on News from Equitymaster
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  • Aug 14, 2017 - Zee Ent: GST Short term Negative but Long term Positive

Zee Ent: GST Short term Negative but Long term Positive
Aug 14, 2017

Zee Entertainment has announced its results for the first quarter of the financial year 2017-18 (1QFY18). The company has reported 2% YoY fall in sales and a 16% YoY growth in profit after tax. Here is our detailed analysis of the results.

Performance summary
  • Zee's sales fell by 2% YoY in 1QFY18.
  • The company managed to curtail its overall operating costs, causing a rise in EBITDA margins from 28.8% in 1QFY17 to 31.4% in the quarter gone by. This caused operating profit to grow by 6.9% YoY, better than the revenue performance.
  • Profit after tax grew by 16% YoY.

    Financial Performance Snapshot
    (Rs m) 1QFY17 1QFY18 Change
    Net sales 15,716 15,402 -2.0%
    Expenditure 11,185 10,559 -5.6%
    Operating profit (EBDITA) 4,531 4,844 6.9%
    EBDITA margin (%) 28.8% 31.4% 2.6%
    Other income 734 1,011 37.7%
    Fair value through P&L 1,132 532 -53.0%
    Interest 75 147 96.0%
    Depreciation & amortisation 251 311 23.8%
    Profit before tax 3,807 4,864 27.8%
    Exceptional items 0 0  
    Tax 1,626 2,344 44.2%
    Profit after tax before minority interest 2,181 2,520 15.5%
    Minority interest 1 -1  
    Share of profit & loss of associate -11 -6  
    Profit after tax 2,170 2,516 16.0%
    Net profit margin (%) 13.9% 16.4%  
    No. of shares (m)   960.4  
    Basic reported earnings per share (Rs)   23.5  
    P/E (x)*   23.0  
    (*on a trailing twelve month basis)
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